New federal rules announced Thursday limiting the ability of companies to increase interest rates on credit cards won’t take effect soon enough and don’t do enough to prevent rate jumps, said local consumer advocates.

Pierce County credit counselor Jennifer Hegstad dubbed one practice called universal default, “a mean little creature,” because companies don’t have to warn consumers that their interest rates are going to be increased. And universal default isn’t entirely banned under the new rules.

Buried in the fine print of cardholder agreements, this provision gives companies the discretion to raise a card’s interest rate if a credit report changes, even if that change is due to a new loan or because the customer was late once paying a different credit card.

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The new rules will limit the practice some. William Ruberry, a spokesman for the Office of Thrift Supervision, said the rules will ban universal default on existing card balances and require advance notice on future balances.

Those changes mark the most sweeping clampdown on the credit-card industry in decades and are aimed at protecting consumers from arbitrary interest-rate increases or inadequate time provided to pay the bills. The rules were approved by the Federal Reserve, the Treasury Department’s Office of Thrift Supervision and the National Credit Union Administration.

But the new rules also won’t take effect until July 2010.

That’s too late for Erin Engle, of Shoreline. In April she discovered on her Washington Mutual VISA credit-card statement that the interest rate on her balance was raised from 9.99% to 23.99%, which came as a shock because she said she always paid on time, sent in more than her minimum payment and had a good credit score.

After speaking to a supervisor in the credit-card unit, Engle said the only explanation she received was that the bank considered her account to be at higher risk of default. That didn’t make sense: She and her husband were keeping up with their mortgage and other credit cards. Engle decided to transfer her balance to a lower-interest card.

“My conclusion was they were trying to scoop their losses from the people who actually paid their balances because they were taking such losses from people who were defaulting,” said Engle, 31.

The universal-default provision is the reason many of her clients have filed for bankruptcy protection, said Everett attorney Mary Schmitt.

If a cardholder is even one day late with a payment, the bank can raise the default interest rate so high — she’s seen one as high as 52 percent — that an individual or family has no chance of paying it off, Schmitt said.

Credit-card issuers turn the accounts over to collections agencies, which get a judgment against the individual, whose wages can then be garnished. It’s not long before the family defaults on their mortgage and is headed for foreclosure, she said.

Amid the recession and rising job losses, consumers have been defaulting at high levels on their credit cards. Bankruptcy filings in Washington state have spiked 40 percent since last year.

The proposals drew more than 65,000 public comments — the highest number ever received by the Federal Reserve. The rules also limit such lender practices as allocating all payments to balances with lower interest rates when a borrower has balances with different rates.